KLCI extends weekly gains despite SST, geopolitical concerns
KUALA LUMPUR: The Kuala Lumpur Composite Index (KLCI) recorded its second straight weekly gain, edging up by 0.1 per cent on a week-on-week (WoW) basis.
According to CIMB Securities Sdn Bhd, the uptick came in the wake of news that the United States and China had reached an agreement on a framework to implement their trade truce on June 11.
"However, the positive momentum was partially offset by concerns over Malaysia's expanded Sales and Service Tax (SST)'s potential impact on corporate earnings and rising geopolitical risks after Israel launched strikes on Iranian military and nuclear sites, including in central Tehran, on June 13," it added.
Meanwhile, the average daily trading value (ADTV) increased by four per cent WoW to reach RM2.1 billion.
CIMB Securities said in the first quarter of 2025, real estate investment trusts (REITs) within its coverage posted earnings that met expectations.
The sector's core net profit (CNP) saw a 13 per cent year-on-year increase, largely supported by acquisitions completed during the 2024 financial year.
"However, we observed signs of weaker consumer sentiment, reflected in lower variable rent contributions among retail REITs.
"We expect a more challenging second half of 2025 (2H25), with potential headwinds from the expanded SST and a possible review of electricity tariffs," it adds.
CIMB Securities expressed a preference for Axis REIT, citing its strong upside potential, relatively steady cost structure, and a robust portfolio of tenants.
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